As the industry adopts environmentally responsible practices some challenges have come to light. The primary one is what constitutes a green lease?

In the absence of a clear definition, both landlords and tenants are finding it hard to figure out what makes a property environmentally sustainable and how much greening of space is needed to contribute to the bottom line, says Ellen Sinreich, president of Green Edge, LLC, an environmental consulting firm, who was among the speakers at the Practising Law Institute's Green Real Estate Summit 2008 in New York last month that addressed the topic.

Today, most commercial real estate leases do not outline specific environmental objectives. They also do not state who is ultimately to bear the costs if either the landlord or the tenant opt to incorporate green components into an existing property.

Many retailers, including behemoths Wal-Mart and Target, and some commercial real estate landlords have pledged their commitment to environmental sustainability, spurred by societal influences as much as their bottom line.

Industry data shows green commercial spaces result in higher occupancy levels and rental rates as well as lower operating costs according to research conducted by the University of San Diego and the CoStar Group, a Bethesda, Md.-based provider of commercial real estate information.

The U.S. Energy Information Administration reports commercial buildings account for 10 percent to 15 percent of all electricity consumed in North America and, as a result, a significant portion of greenhouse gas emissions. Any reduction of electricity and increased use of clean energy sources will inhibit damage to the environment.

In addition to the societal merits, investing in green leases makes good business sense. In the third quarter of 2007, green buildings commanded rents of $2.65 per square foot more than in non-sustainable commercial buildings, cites research from the University of San Diego.

Given the industrywide push for sustainability and the growing insistence on environmentally sustainable real estate practices from federal, state and municipal governments, it is imperative that both landlords and tenants make leases flexible enough to allow for green accommodations in the future, says S. Michael Brooks, a partner specializing in commercial real estate at Aird & Berlis, a Toronto-based law firm. With commercial leases spanning an average of between 10 and 20 years, he notes, the parties entering into a lease today should allow for future sustainability efforts.

How can real estate executives ensure their green leases are enforcable? The answer is to make environmental objectives clear and as specific as possible. One way to ensure it is to adhere to the Leadership in Energy and Environmental Design (LEED) certification from the U.S. Green Building Council. For uncertified properties, the lease should have clauses stating targets for the building's environmental performance, including the anticipated amount of energy use, water consumption and waste reduction. It should also outline the technologies and measures to be used to improve environmental sustainability. Those may include, among others: preferred products, alternate sources of energy such as solar and wind power,the use of day lighting, requirements for reducing water consumption for landscaping and low-flow faucets and toilets.

To mitigate legal wrangling, Brooks adds, the lease should also state who is financially responsible for incorporating the sustainability features and the resulting consequences should the modifications have a negative impact on operations.

And, if implementing a green lease involves extra effort on the part of both the tenant and the landlord, the benefits should justify the effort.

LoopLink Your Listings

LoopNet has upgraded its Web-based listings. LoopLink 7.0 permits users to search for properties listed among more than 1,000 commercial real estate organizations and companies. CB Richard Ellis, Grubb & Ellis, and Staubach Co. use the technology to market properties available for sale or lease on their Web sites. The latest version includes mapping tools that provide street, bird's-eye and aerial views of properties along with real-time sales and leasing information. It also offers clients the option to distribute listings via the LoopNet's exclusive online newspaper network, which consists of more than 100 newspaper Web sites.

Simon's EPA Star

Simon Property Group was named a 2008 Energy Star partner by the U.S. Environmental Protection Agency. The Indianapolis-based developer was cited for its energy management and reduction of greenhouse gases at its more than 300 malls across the United States. It is the only REIT to be recognized this year and the first since 2003. The absolute corporate energy use of Simon's operations decreased by nearly 10 percent from 2003 to 2006. That decrease represents a reduction of almost 68,000 tons of carbon emissions and 102 million kilowatt-hours in energy use each year worth about $11 million annually.

GGP to Resolve

General Growth Properties has selected Resolve Technology to integrate data from across the developer's enterprise to provide users with customized real estate reports. Chicago-based General Growth will use the Boston-based Resolve's software to integrate and consolidate information. The technology enables REITs to optimize the management of their portfolios. The reporting and business solutions integrate data from disparate sources to produce reliable and timely information for decision makers throughout the organization. The automated data collection eliminates the laborious and tedious manipulation of spreadsheets, which hinders access to timely information in a fast-changing market.

DDR's Kids

Developers Diversified Realty has expanded its charitable program Kids with Heart. The company's mission is to leverage its shopping centers throughout the U.S. to promote community involvement among youths as well as kindness and consideration for others who are less fortunate. The program was designed to encouarge kids to volunteer and rewards them for doing things to help others. Initiated last year in the United States, Developers Diversified broadened the program to 29 centers in the company's portfolio, including a handful in Puerto Rico. Participants volunteered for local charities and raised funds for groups and undernourished children overseas. This year, the firm recognized hundreds of children at celebrations during Valentine's Day weekend. For example, in Hutchinson, Minn., representing the Hutchinson Mall, a group of children held a concert that raised enough funds to provide 12,550 meals for hungry children around the world.